Portland General Electric Co · NYSE:POR
Portland General Electric — 45th EEI Financial Conference 2010
36 slides from Portland General Electric's conference presentation, Oct 31, 2010
Slide 1: 45th EEI Financial Conference
45th EEI Financial Conference October 31, 2010 to November 3, 2010 1 Copyright © 2010 Portland General Electric. All Rights Reserved.
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of October 28, 2010 Except as expressly noted, the information in this presentation is current as of October 28, 2010 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2010 — and should not be rel
Slide 3: Portland General Investment Highlights
Portland General Investment Highlights – Vertically integrated, regulated electric utility “Pure-play” – Attractive service territory and constructive Stability: electric regulatory dialogue utility – Regulated ROE of 10.0% Dividend Yield – Diversified, high-performing generation portfolio Operation
Slide 4: Portland General Strategic Direction
Portland General Strategic Direction Mission: To be a company our customers and communities can depend upon to provide electric service in a safe, responsible and reliable manner, with excellent customer service, at a reasonable price. Operational Business Corporate Excellence Growth Responsibility
Slide 5: Attractive Regulated Business Profile
Attractive Regulated Business Profile • Vertically integrated electric utility – Single state jurisdiction (Boardman) (Sherman Co.) – Virtually 100% regulated (Boardman) business – No holding company structure • Attractive, compact service WA territory with 822,407 retail customer accounts(1) OR Net
Slide 6: Attractive Service Territory
Attractive Service Territory • Compounded annual load growth(2) and Weather Adjusted Annual Load (1) customer growth of 1.0% from 2003 - 2009 Annual Load − Oregon is a leading in-migration state (thousands of MWH) 20,000 • 2009 loads(2) declined 2.4% from 2008 loads(2) 19,000 − Primary driver: Indus
Slide 7: Constructive Regulatory Environment
Constructive Regulatory Environment • Oregon Public Utility Commission − Governor-appointed Commission with staggered four-year terms (Ray Baum-Chair 8/2011, John Savage 3/2013, Susan Ackerman 3/2012(1)) • Return on Equity & Capital Structure − 10.0% allowed return on equity − 50% debt and 50% equit
Slide 8: Focus on Operational Excellence
Focus on Operational Excellence Operational Excellence Operational Efficiency Customer Satisfaction • Ongoing capital investments to improve • Top deciles customer satisfaction quality of service, reduce costs and rankings in both residential and generate adequate shareholder return general business
Slide 9: Power Supply Portfolio
Power Operational SupplyExcellence Portfolio Resource Capacity (at 12/31/09) (1) Power Sources as % of Retail Load % of Total Capacity Capacity 2009 Actual Hydro Purchased Deschutes River Projects 298 MW 6.6% Gas/Oil Clackamas/Willamette Power River Projects 191 4.2 27% 24% Hydro Contracts 698 15.4
Slide 10: Significant Business Growth: Near-Term Growth Opportunities
Significant Business Growth Near-Term Growth Opportunities … Capital Expenditures Rate Base (Average) ($ millions) ($ millions) 800 $696 3,400 (5) $3,152 700 3,200 (4) 600 $473 3,000 $2,863 $455 2,800 500 $383 (2) (3) 400 $317(1) 2,600 $2,381 $2,425 2,400 300 (2) 2,200 200 $1,939 2,000 100 1,800 0 1
Slide 11: Business Growth: Biglow Canyon
Business Growth: Biglow Canyon Biglow Canyon Wind Farm • Columbia Gorge, eastern Oregon • 450 MW total installed capacity • Total cost approximately $1 billion • Completion of Biglow Canyon Phase III brings PGE’s load served by renewables to approximately 11% (1) Phase I Phase II Phase III Nameplate
Slide 12: Business Growth: General Rate Case
Business Growth: General Rate Case • General rate case filed in February 2010 based on a 2011 test year • Reached agreement among PGE, the OPUC staff and customer groups on all items related to revenue requirement, which have resulted in the following outcomes compared to the initial request: Initia
Slide 13: Business Growth: General Rate Case (cont'd)
Business Growth: General Rate Case (cont’d) • Summary of revised revenue requirement increase in millions: General Net Variable Rate Case Power Costs Total Original Filing $158 ($33) $125 Revenue requirement stiputlations (43) - (43) Cost of capital stipulation (15) - (15) NVPC update (1) 5 (13) (8)
Slide 14: Business Growth: Load & Resource Forecast
Business Business Growth Growth: Load & Resource Forecast Load Growth PGE’s long-term retail load is expected to grow consistently while certain long-term power purchase contracts expire, driving the need for additional generation capacity. In 2015 we project an energy and capacity shortfall of 873
Slide 15: Integrated Resource Plan Process
… Business Driven by Growth: Identified Integrated CapitalResource Projects Plan Integrated Resource Planning Process • Under OPUC guidelines, PGE is required to file an Integrated Resource Plan (IRP) within two years of acknowledgment of the previous plan • The IRP requires that the primary goal mu
Slide 16: 2009 Integrated Resource Plan (cont'd)
2009 Integrated Business Growth: Resource Integrated Resource Plan (cont’d) • Expected resource requirements to include expansion of energy efficiency, additional renewable resources, purchase power agreements and new facilities to meet energy and capacity needs. • Potential capital projects: – Base
Slide 17: 2009 Integrated Resource Plan: RFP Projects
2009 Integrated Business Growth: Resource Integrated Resource Plan (cont’d) • Upon the OPUC’s acknowledgement of the Integrated Resource Plan, PGE will conduct three separate “Request For Proposals” (RFP’s) and will bid into each RFP with its own self-build project. • Potential Request For Proposal
Slide 18: Emission Controls at the Boardman Coal Plant
2009 Integrated Business Growth: Resource Integrated Resource Plan (cont’d) Emission Controls at the Boardman Coal Plant • Oregon Environmental Quality Commission (OEQC) adopted a rule in June of 2009 requiring installation of emissions controls in three phases (2011-2017) with the plant operating t
Slide 19: Cascade Crossing Transmission Project
Business Growth: Integrated Resource Plan (cont’d) Cascade Crossing Transmission Project • 500 KV double circuit, approximately 200 miles • Connects Boardman, Coyote Springs, and potential new baseload energy resources into the southern part of PGE’s operating area • Provides transmission access for
Slide 20: Prudent Financial Strategy
Prudent Financial Strategy Target Capital Structure 50% Debt, 50% Equity Recent Financing Debt Issuance • Completed issuance of $249 million in 2010 − Issued $70 million of First Mortgage Bonds (FMBs) in January at 3.46% − Remarketed $121 million of Pollution Control Bonds backed by FMBs in March at
Slide 21: Prudent Financial Strategy: Liquidity
Prudent Financial Strategy Liquidity (as of 09/30/10) • $370 million revolving credit facility – $360 million matures in July 2013 ($ millions) – $10 million matures in July 2012 • $30 million revolving credit facility matures $600 in June 2012 600 • $200 million revolving credit facility matures in
Slide 22: Prudent Financial Strategy: Maturities, Dividends, Ratings
Prudent Financial Strategy Manageable Near-term Debt Maturities Debt/Capitalization $186 Debt % 60% 55% 53% 53% 53% 50% $100 $100 50% 47% $73 45% 40% 35% $0 30% (1) 2010 2011 2012 2013 2014 2006 2007 2008 2009 2010E Dividend Growth (2) Credit Ratings $0.265 2% increase $0.260 Senior Senior $0.255 Se
Slide 23: Portland General Investment Highlights
Portland General Investment Highlights “Pure-play” electric Stability: utility Dividend Yield Operational excellence Attractive total return proposition Low-risk growth plan Growth: Prudent Earnings Per Share financial strategy 23
Slide 24: Investor Relations Contact Information
Investor Relations Contact Information William J. Valach Emilie L. Witkowski Director, Investor Relations Analyst, Investor Relations 503-464-7395 503-464-8586 William.Valach@pgn.com Emilie.Witkowski@pgn.com Portland General Electric Company 121 S.W. Salmon Street Suite 1WTC0403 Portland, OR 97204 w
Slide 25: Appendix
Appendix Table of Contents • Recent Financial Results p.26 • Power Cost Adjustment Mechanism (PCAM) p.27 • Decoupling Mechanism p.28-29 • Senate Bill 408 p.30 • 2009 IRP Energy Action Plan p.31 • 2009 IRP Capacity Action Plan p.32 • Renewable Portfolio Standard p.33 • Estimated RPS Position by year
Slide 26: Recent Financial Results
Recent Financial Results Net Income Earnings per Share (diluted) ($ millions) $200 $2.50 $2.33 $145 $2.00 $1.65 - $1.80 $150 $124 - $136 $1.50 $1.39 $95 $1.31 $100 $87 $1.00 $50 $0.50 $0 $0.00 2007 2008 2009 2010E 2007 2008 2009 2010E Key Items ($ earnings per diluted share) 2007 2008 2009 2010 • Bo
Slide 27: Power Cost Adjustment Mechanism
Recovery of Power Costs Annual Power Cost Update Tariff • Annual reset of rates based on forecast of net variable power costs (NVPC) for the coming year • Following OPUC approval, new prices go into effect on or around January 1 of the following year 2010 Power Cost Adjustment Mechanism (PCAM) Power
Slide 28: Decoupling Mechanism
Decoupling Mechanism • The decoupling mechanism is intended to allow recovery of reduced revenues resulting from a reduction in sales of electricity resulting from customers’ energy efficiency and conservation efforts – A condition of the decoupling mechanism is a reduction in the Company’s allowed
Slide 29: Decoupling Mechanism: Simplified Example
Decoupling Mechanism Simplified Decoupling Example Assumptions: • Residential customer • Monthly Kwh usage: 1,000 • Cost per Kwh: $0.10 • Weather adjusted decrease in monthly usage: 10% • PGE cost structure: 50% power costs and 50% all other costs Analysis: Base monthly bill: 1,000 x $0.10 = $100 Re
Slide 30: Oregon Senate Bill 408
Oregon Senate Bill 408 • Beginning January 1, 2006, a utility tax law, Oregon Senate Bill 408 (SB 408), requires the OPUC to track estimated income taxes collected by Oregon utilities in rates and compare this amount to adjusted taxes paid to taxing authorities by the utility or corporate consolidat
Slide 31: 2009 IRP Energy Action Plan
… Energy Driven Action by Identified Plan Capital Projects 2009 Integrated Resource Plan – Energy Energy Action Plan in MWa (1) 2015 Thermal Resource Actions Combined Cycle Combustion Turbine 406 Combined Heat & Power 2 Boardman Lease Contract - Renewable & EE Resource Actions ETO Energy Savings Tru
Slide 32: 2009 IRP Capacity Action Plan
… Capacity Driven Action by Identified Plan Capital Projects 2009 Integrated Resource Plan – Capacity (1) (2) Capacity Action Plan in MW Winter 2015 Thermal Resource Actions Combined Cycle Combustion Turbine 441 Combined Heat & Power 2 Boardman Lease Contract - Renewable & EE Resource Actions Existi
Slide 33: Renewable Portfolio Standard
… Renewable Driven byPortfolio Identified Standard Capital Projects Additional Renewable Resources • Integrated Resource Plan addresses 122 MWa of wind or other renewable resources necessary to meet requirements of Oregon’s Renewable Portfolio Standard by 2015 Renewable Portfolio Standard • Renewabl
Slide 34: Estimated RPS Position by Year
Estimated RPS Position by Year (1) • PGE will be in compliance with 2015 renewable resource requirement with addition on 122 MWa of renewables resources 2011 2015 2020 2025 Calculate Renewable Resource Requirement: PGE retail bus bar load 2,442 2,624 2,886 3,179 Remove incremental EE (16) (86) (135)
Slide 35: Smart Grid
Smart Grid Smart Meters • Provides two-way communications with residential and commercial customers • Vendor: Sensus Metering Systems • Technology: FlexNet radio frequency technology • Deployment: 850,000 residential and commercial customer meters • Installed approximately 823,000 meters as of Septe
Slide 36: Ce a land General
Ce a land General Po NZ Electric Geoan General Electric 36
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